The Stooges are choreographers at B. O. Pictures who are assigned to teach island natives how to dance. The studio's president, Mr. Baines (Emil Sitka) has purchased the island of Rarabonga for his next musical extravaganza, but learns that the locals have never heard of dancing.

When the Stooges arrive at Rarabonga, they soon learn that the natives are head hunters under the control of powerful Witch Doctor Varanu (Kenneth MacDonald). Shemp makes it clear he does not want the "hair cuts down to my neck!" and the Stooges try to flee with the help of the Tribe King's daughter Luana (Jean Willes). She wants them to rescue her boyfriend from the witch doctor, who plans to behead him in the morning—along with the Stooges. In one of the huts, the Three Stooges try to get their hands on a box of surplus World War II hand grenades guarded by a living Kali type four-armed totem idol (Lei Aloha). After getting the daylights beat out of them by the fierce idol, the boys grab the box of grenades, and fool the Witch Doctor into proving his expertise with his sword by slicing the box of grenads with his huge sword, and the grenades promptly explode, blowing him out of the atmospehre.

With Witch Doctor Varanu gone, the Stooges commence with their choreography lessons and teach the natives to dance.

Hula-La-La was the only Three Stooges film directed by producer Hugh McCollum, who gave the medium a shot while Edward Bernds was busy directing feature films. Bernds described McCollum's directing style as "gentle and tasteful", like McCollum himself.